Job loss and Education : Effects of adult education on wage earnings for displaced workers

Abstract: Sweden suffered one of its worst economic crises during the 1990s. Many individuals lost their jobs due to large workforce reductions and workplace shutdowns. This resulted in forming a unique group of displaced workers with a broad set of skills, abilities and work experience. A displaced worker had three choices, finding a new job, enrolling in education, or neither of these two. This study assesses the long-term effect on wage earnings from enrollment in adult education (Komvux) for workers aged 20-47 that lost their jobs in 1992 and had two years of upper secondary school education. Through analysing registry data from 1990-2015 which includes direct measures of ability, this study found that 1) the long-term total net benefit 24 years after enrollment is negative for both females and males (full samples). 2) It can take up to 14 years for the difference-in-difference in wage earnings between enrollees and non-enrollees to converge to the pre-enrollment level. 3) Controlling for ability among males have a negative effect on the results for enrollees. 4) Analysing heterogeneous effect found that females that did not register as unemployed fared best, and males over 25 fared worst from enrollment.